The fiscal impact of the 23 regional deductions will be 85% higher than the 19.5 million of the previous year.

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The 2023 income tax campaign gets underway in the Balearic Islands

Eight out of ten taxpayers meet the income level requirements to benefit from the deductions

The 2023 income tax campaign that begins on 3 April in the Balearic Islands is the one that will have more deductions, more taxpayers who can benefit because they meet the required income levels and more fiscal impact. In total, there will be 23 regional deductions to be applied in the personal income tax return (IRPF), 8 of them – 35% – improved or newly created.

With the increase in many cases of the required income levels, 81% of taxpayers could benefit from these deductions. Moreover, the estimated saving is 36 million euros, 85% more than in the previous year, when it was 19.5 million.

This was detailed today at a press conference by the Minister of Economy, Finance and Innovation, Antoni Costa, and the tax administrator of the Tax Agency of the Balearic Islands, Alberto Roibal. Costa pointed out that regional deductions are not automatically included in the draft tax return and asked taxpayers on the Islands “to review their tax return and check whether any of the regional deductions can be applied before agreeing to them”.

Deductions

In the area of housing, taxpayers in the Balearic Islands can benefit from five tax deductions. The deduction for renting a home has been improved, which helps to pay the rent; it has been increased from a maximum of 440 € to 530 € (15 % of the expenditure), and the recipients has been widened, as the over 65s with no work activity are included. In addition, the deduction for the same purpose has also been improved with 20% of the expenditure with a maximum of €650 for people under 30 years of age, people with a disability of more than 33%, large families and single parents (in the latter two cases, the income limit has been increased by 20%). The deduction to compensate for the rise in interest on variable mortgages has also been improved, as it now stands at €400 compared with €250 the previous year.

In this area, three other deductions are maintained: the deduction for improving the sustainability of housing, with a deduction of 50% of the expenditure and with a limit of 10,000 euros; the deduction for leases of property used for housing, to help the owner and reach 75% of the expenditure on insurance premiums for non-payment, with a limit of 440 euros of the regional quota; and the deduction for leases derived from temporary relocation for work reasons, with 15% of the expenditure and also with a maximum of 440 euros.

In the field of education, there are three possible deductions. The deduction for higher education studies outside the island of residence has been improved from €1,760 to €1,880 per child who is economically dependent on the parents (50% of the autonomous community tax), and the requirement that there is no educational offer in Mallorca has been removed; and the deduction for the purchase of textbooks with 100% of the cost and now up to €250 of the tax for each child. In this regard, the €350 is now available specifically for children under 30, people with a disability of more than 33%, large families and single-parent families (in the latter two cases, the income limit has been increased by 20%). The tax credit for extracurricular learning of foreign languages is maintained, with 15% of the expenditure and a limit of €110 per child.

On the other hand, four deductions refer to personal situations of the taxpayer. Two of them are newly created: the deduction for birth and the deduction for adoption, with the same amounts as the regional tax (€800 for the first child, €1,000 for the second, €1,200 for the third and €1,400 for the fourth and subsequent children), and with a 20% increase in the income limit for large and single-parent families. In the case of the deduction for births, and once the relevant regulations have been developed, it will be possible to request the advance payment retroactively to 1 January 2024, and will not have to wait to file the tax return next year – for the current tax year this measure has no effect.

The deduction for fostering children under 6 years of age for reasons of reconciliation has also been improved and has been extended to 50% of the expenses and a limit of €900 for children under 30, people with a disability of over 33%, large families and single-parent families (in the latter two cases, the income limit has been increased by 20%). Likewise, the deduction is maintained for taxpayers with physical, sensory or mental disabilities.

In the case of the personal and family minimum, it has been increased by 10% for the following cases: taxpayers over 75 years of age, for the second and subsequent children (until now, it was only from the third child onwards) and for ascendants dependent on the taxpayer.

Finally, the remaining eight tax deductions are maintained. One of them refers to investments in shares or equity investments in new entities, and the others are included in the “Donations and aid” block, and include subsidies for catastrophic areas, to alleviate the impact of inflation during 2023, donations to entities for R&D, for the promotion of the Catalan language, to third sector entities, and donations or transfer of use related to cultural, scientific and/or sporting patronage.

Agile Income

It should be remembered that the ATIB maintains the Renta Ágil service to help you file your personal income tax return in addition to the service offered by the State Tax Administration Agency (AEAT) at its offices.

From 28 May to 28 June, it will be possible to make an appointment to file the tax return in person between 3 June and 1 July.